Answer:
a) i. Direct labor rate variance = Quantity of direct labor used * (Actual rate for direct labor - Standard rate for direct labor)
= 5,000*(22.75-24)
= -6,250 (Favorable)
ii. Direct labor time variance = Standard rate for direct labor * (Quantity of direct labor used - Bicycles completed in October * Standard direct labor per bicycle)
= 24 * (5000 - 800 * 6)
= 4,800 (Unfavorable)
iii. Total Direct labor cost variance = (Quantity of direct labor used * Actual rate for direct labor) - (Bicycles completed in October * Standard direct labor per bicycle * Standard rate for direct labor)
= (5000 * 22.75) - (800 * 6 * 24)
= -1450 (Favorable)
Answer:
The total cost variance of labor will be "-1,450 (favorable)". The further explanation is given below.
Explanation:
According the question,
Direct labor rate variance will be:
⇒ [tex]5000\times (22.75-24)[/tex]
⇒ [tex]5000\times (-1.25)[/tex]
⇒ [tex]-6,250 \ (favorable)[/tex]
Direct labor time variance will be:
⇒ [tex]24\times (5000-800\times 6)[/tex]
⇒ [tex]24\times 200[/tex]
⇒ [tex]4,800 \ (unfavorable)[/tex]
Now,
The Total Direct labor cost variance will be:
⇒ [tex](5000\times 22.75)-(800\times 6\times 24)[/tex]
⇒ [tex](113,750)-(115,200)[/tex]
⇒ [tex]-1,450 \ (favorable)[/tex]
Denver Company, a calendar year corporation, had the following actual income before income tax expense and estimated effective annual income tax rates for the first two quarters in year x8: quarter income before tax estimated tax rate first $100k 30% second $140k 24% Denver's income tax expense in its interim income statement for the second quarter should be:
Answer:
Denver Company
Income Tax Expense for the second quarter:
Pre-tax quarter income = $140,000
Estimated tax rate = 24%
Tax Expense = $140,000 x 24%
= $33,600
Explanation:
a) Data:
Quarter income before tax estimated tax rate
first $100k 30%
second $140k 24%
b) Denver's quarter second income tax expense is the product of the pretax income for the second quarter and the estimated income tax rate for the quarter. The resulting calculation shows the estimated income tax expense that has to be settled by Denver. If it is not settled in the quarter second period, it has to be carried forward to the next quarter as a liability under the heading, Income Tax Payable.
A company is considering expanding their production capabilities with a new machine that costs $38,000 and has a projected lifespan of 8 years . They estimate the increased production will provide a constant $5,000 per year of additional income . Money can earn 1.7% per year, compounded continuously . Should the company buy the machine
Answer:
the company should not buy the machine.
Explanation:
Given that:
cost of the new machine = $38000
lifespan = 8 years
constant income = 5,000
Interest = 1.7%
no of days = 365
The value of earning at the time of buying can be calculated as follows:
[tex]= \dfrac{5000}{(1+ \dfrac{1.7}{100})^8}+ \dfrac{5000}{(1+ \dfrac{1.7}{100})^7}+\dfrac{5000}{(1+ \dfrac{1.7}{100})^6}+...+ \dfrac{5000}{(1+ \dfrac{1.7}{100})^0}[/tex]
[tex]= 5000 \begin {pmatrix} \dfrac{1}{(1.017)^8}+ \dfrac{1}{(1.017)^8}+\dfrac{1}{(1.017)^6}+...+ 1} \end {pmatrix}[/tex]
Sum of a Geometric progression [tex]S=a \dfrac{(r^n -1)}{(r-1)}[/tex]
[tex]S=(\dfrac{1}{1.017})^8 \dfrac{((1.017)^9 -1)}{(1.017-1)}[/tex]
[tex]S= \dfrac{((1.017)^9 -1)}{ (1.017)^8(0.017)}[/tex]
S = 8.4211
The value of earning at the time of buying = (5000 × 8.4211)-$5000
The value of earning at the time of buying = $42105.5 -$5000
The value of earning at the time of buying = $37105.5
The Machine price = $38000
If the value - Machine price > 0, then the company should buy the machine
∴
= $ 37105.5 - $38000
= -$ 894.5
Since the value is negative which is less than zero, then the company should not buy the machine.
The company should not buy the machine since it earns a negative NPV of $894.25.
Data and Calculations:
Cost of machine in present value = $38,000
Projected lifespan = 8 years
Additional annual income = $5,000
Compound interest rate = 1.7%
Present value annuity factor for 1.7% for 8 years = 0.13475
Present value of annual income = $37,105.75 ($5,000/0.13475)
Net present value = -$894.25 ($38,000 - $37,105.75)
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Conclusions and recommendations are the most widely read sections of any report. Conclusions summarize a nd explain your findings and are the heart of your report. The ability to draw sound conclusions and make clear recommendations from your research is crucial to business success.
When drawing conclusions, make sure you________.
Consider the scenario:
You are making recommendations after researching and writing a report on employee vacation time and job satisfaction. What writing tips should you keep in mind when writing your recommendations?
A. Your recommendations should always be the result of prior logical analysis.
B. Your recommendations should never be in the form of a command.
C. You can combine recommendations and conclusions.
D. You should use words such as maybe and perhaps.
E. You can omit conclusions and move straight to recommendations in short reports.
Answer:
a. When drawing conclusions, make sure you summarize and explain your findings.
b. Tips for writing recommendations:
A. Your recommendations should always be the result of prior logical analysis.
B. Your recommendations should never be in the form of a command.
Explanation:
A good conclusion touches the theme or main topic, summarizes the main points, and connects with the introduction, but with a sense of closure. Conclusions should be sound and logical. Irrelevant conclusions are annoying to the senses. Without a conclusion, the report will sound like one illogical move without clear direction and purpose.
Recommendations should address improvement efforts based on the problem(s) presented in the body of the report.
In the short run, increasing marginal costs always imply increasing average total costs. a. Trueb. False
Answer:
The answer is A. True.
Explanation:
Marginal Cost is the cost of producing one more product unit.
Marginal Cost = Average Total Cost / Average Goods Output
Therefore, in the short run, an increase in Marginal Cost implies a similar increase in Average Total Cost.
An all-equity firm is considering the following projects:
Project Beta IRR
W .85 8.9%
X .92 10.8
Y 1.09 12.8
Z 1.35 13.3
The T-bill rate is 4 percent, and the expected return on the market is 11 percent.
a. Which projects have a higher expected return than the firm's 11 percent cost of capital?
b. Which projects should be accepted?
c. Which projects would be incorrectly accepted or rejected if the firm's overall cost of capital were used as a hurdle rate?
Answer:
Projects Y and Z
b. Projects W and Z
c. Projects W and Y
Explanation:
CAPM equation : Expected return = Risk free rate + Beta x (Expected market return - Risk free rate)
W = 4% + [0.85 x (11% - 4%)] = 9.95%
X = 4% + (0.92 x 7%) = 10.44%
Y = 4% + (1.09 x 7%) = 11.63%
Z = 4% + (1.35 x 7%) = 13.45%
Projects Y and Z have an expected return greater than 11%
b. Projects W and Z should be accepted because its expected return is higher than the IRR
c. Project W would be incorrectly rejected because the expected rate of return is less than the overall cost of capital (i.e. 9.95 is less than 11). But its expected rate of return is greater than the IRR
Y would be incorrectly accepted because its expected rate of return is greater than the overall cost of capital but its expected rate of return is less than the IRR
UPS, a delivery services company, has a beta of , and Wal-Mart has a beta of The risk-free rate of interest is and the market risk premium is %. What is the expected return on a portfolio with 40% of its money in UPS and the balance in Wal-Mart?
The question is incomplete as it does not contain values. The following is the complete question.
UPS, a delivery services company, has a beta of 1.2, and Wal-mart has a beta of 0.8. The risk-free rate of interest is 4% and the market risk premium is 7%. What is the expected return a portfolio with 40% of its money in UPS and the balance in Wal-Mart?
Answer:
The expected return of the portfolio is Portfolio r = 0.1072 or 10.72%
Explanation:
The expected return of a portfolio is the weighted average of the individual stocks' expected returns that form up the portfolio.
The formula for portfolio's expected return is as follows,
Portfolio r = wA * rA + wB * rB + ... + wN * rN
Where,
w is the weight of each stock in the portfolior is the expected return of each stockTo calculate the expected return of the portfolio, we will first calculate the expected return of UPS and Wal Mart using the CAPM equation.
The formula for expected return under CAPM is,
r = rRF + Beta * rpM
Where,
rRF is the risk free raterpM is the risk premium of marketr UPS = 0.04 + 1.2 * 0.07
r UPS = 0.124 or 12.4%
r Wal Mart = 0.04 + 0.8 * 0.07
r Wal Mart = 0.096 or 9.6%
Portfolio r = 0.4 * 0.124 + 0.6 * 0.096
Portfolio r = 0.1072 or 10.72%
ane is planning to offer a Groupon for inner tube rentals that she will distribute on hot, sunny, summer days by the river that runs through her town. Based on her past experience with Groupon, she has assigned the following probability distribution to the number of tubes she will rent on a randomly selected day. If Jane would like her expected revenue to be at least $300 per day, what should the Groupon price be? (Round your answer up to the nearest whole dollar amount.)
Probability assigned:|
x 30 60 120 180
P(x) .10 .40 .40 .10
Answer:
Jane
Price of Groupon for a revenue of $300 is:
$3
Explanation:
a) Data and Calculations:
Expected Sales volume:
Number of Tubes x 30 60 120 180
Probability P(x) .10 .40 .40 .10
Expected values 3 24 48 18
Total = 93 tubes
Groupon price = $300/93 = $3.23
b) Jane's price for each Groupon will be the rent revenue per day divided by the expected number of tubes to rent daily. The expected number of tubes is derived by multiplying each expected number of tubes by its probability and then summing up the results.
Firm A has set an MSRP of MXN 25 for its product, and the average discount to distributors is 30%. What is revenue on 40 million units
Answer: 700 million
Explanation:
From the question, we are informed that Firm A has set an MSRP of MXN 25 for its product, and the average discount to distributors is 30%.
The revenue on 40 million units will be calculated as:
= (40,000,000 × 25) × (100% - 30%)
= 1,000,000,000 × 70%
= 1,000,000,000 × 0.7
= 700,000,000
The answer is 700 million.
The revenue on 40 million units is 700,000,000.
The calculation is as follows:
= (40,000,000 × 25) × (100% - 30%)
= 1,000,000,000 × 70%
= 1,000,000,000 × 0.7
= 700,000,000
Therefore we can conclude that The revenue on 40 million units is 700,000,000.
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Funday Park competes with Fun World by providing a variety of rides.
Funday sells tickets at $85 per person as a one-day entrance fee.
Variable costs are $17 per person and fixed costs are $428,400 per month.
Required:
1. Supposed Funday Park cuts its ticket price from $85 to $68 to increase the number of tickets sold. Compute the new breakeven point in tickets and in sales dollars.
a. The new breakeven point in tickets is? _
b. The new breakeven point in sales dollars is? $_
2. Ignore the information in question 1. Instead assume that Funday Park increases the variable cost from $17 to $34 per ticket. Compute the new breakeven point in tickets and in sales dollars.
a. The new breakeven point in tickets is?
b. The new breakeven point in sales dollars is? $_
3. Ignore questions 1 and 2. Supposed Funday Park reduces fixed costs from $428,400 per month to $319,600 per month. Compute the new breakeven point in tickets and in sales dollars.
a. The new breakeven point in tickets is?
b. The new breakeven point in sales dollars is? $_
4. Ignore information in questions 1 - 3. If Funday Park expects to sell 6,400 tickets, compute the margin of safety in tickets and in sales dollars.
a.
- = Margin of safety in units
- =
b.
- = Margin of safety in dollars
- =
5. Ignore information in questions 1 - 4. If Funday Park expects to sell 6,400 tickets, compute the operating leverage. Estimate the operating income if sales increase by 20%.
a.
/ = Degree of operating leverage
/ =
b. Estimate the new operating income if total sales increase by 20%?
The estimated operating income will be? $
Answer:
1. Supposed Funday Park cuts its ticket price from $85 to $68 to increase the number of tickets sold. Compute the new break even point in tickets and in sales dollars.
a. The new break even point in tickets is?
= $428,400 / ($68 - $17) = 8,400 tickets
b. The new break even point in sales dollars is?
8,400 x $68 = $571,200
2. Ignore the information in question 1. Instead assume that Funday Park increases the variable cost from $17 to $34 per ticket. Compute the new break even point in tickets and in sales dollars.
a. The new break even point in tickets is?
= $428,400 / ($85 - $34) = 8,400 tickets
b. The new break even point in sales dollars is?
8,400 x $85 = $714,000
3. Ignore questions 1 and 2. Supposed Funday Park reduces fixed costs from $428,400 per month to $319,600 per month. Compute the new break even point in tickets and in sales dollars.
a. The new break even point in tickets is?
= $319,600 / ($85 - $17) = 4,7400 tickets
b. The new break even point in sales dollars is?
4,700 x $85 = $399,500
4. Ignore information in questions 1 - 3. If Funday Park expects to sell 6,400 tickets, compute the margin of safety in tickets and in sales dollars.
break even point = $428,400 / ($85 - $17) = 6,300
a. Margin of safety in units = (6,400 - 6,300) / 6,400 = 1.56%
b. Margin of safety in dollars = ($544,000 - $535,500) / $544,000 = 1.56%
5. Ignore information in questions 1 - 4. If Funday Park expects to sell 6,400 tickets, compute the operating leverage. Estimate the operating income if sales increase by 20%.
EBIT₀ = [6,400 x ($85 -$17)] - $428,400 = $435,200 - $428,400 = $6,800
EBIT₁ = [7,680 x ($85 -$17)] - $428,400 = $522,240 - $428,400 = $93,840
% change in EBIT = ($93,840 - $6,800) / $6,800 = 12.8 x 100 = 1280%
a. Degree of operating leverage = 1280% / 20% = 64
b. Estimate the new operating income if total sales increase by 20%?
The estimated operating income will be $93,840
Deming, the proponent of total quality management, argued that management has the responsibility to train employees in new skills.
A. True
B. False
Answer:
Its TRUE
Explanation:
Management should train employees in new skill, where Deming argued that management has the responsibility to train employees in new skills to keep pace with changes in the workplace. In addition, he believed that achieving better quality requires the commitment of everyone in the company.
Explain how to use the decision trees and Monte Carlo analysis for quantifying risk. Give an example of how you would use each technique on an IT project.
Answer:
The answer is below
Explanation:
Decision Tree Analysis is a form or type of quantitative risk assessment tool and techniques that involves a diagram that indicates the significances of choosing one or other alternatives.
In other words, the purpose of the tool is to assist you to select between several courses of action.
For example, lines are drawn towards the right for each possible solution, and then the solution is written along the line. Then evaluation of each alternative can be easily considered.
On the other hand, Monte Carlo Analysis is also a form or type of quantitative risk assessment tools and techniques that utilizes optimistic, most probable, and cynical estimates to infer the total project cost and project completion dates.
For example, an estimate of the probability of completing a project at a cost of $100M can be carried out using Monte Carlo Analysis
x
Which is the first step toward initiating efficient and effective international business negotiations:
Answer: Selecting an appropriate negotiation team
Explanation:
The first step toward initiating efficient and effective international business negotiations is selecting an appropriate negotiation team.
When an appropriate negotiation team has been selected to negotiate on behalf of a particular company, negotiation becomes easier and are more feasible and both parties can agree on a particular stance.
You borrow $25,000 to be repaid in 24 monthly installments of $1,212.17. The annual interest rate is closest to:
Answer:
15%
Explanation:
For computing the annual interest rate we need to apply the RATE formula i.e to be shown in the attachment below;
Given that,
Present value = $25,000
Future value or Face value = $0
PMT = $1,212.17
NPER = 24 months
The formula is shown below:
= Rate(NPER;PMT;-PV;FV;type)
The present value come in negative
So, after applying the above formula,
The annual interest rate is
= 1.25% × 12 months
= 15%
Petrus Framing's cost formula for its supplies cost is $2,300 per month plus $6 per frame. For the month of March, the company planned for activity of 861 frames, but the actual level of activity was 856 frames. The actual supplies cost for the month was $7,790. The activity variance for supplies cost in March would be closest to:
Answer:
$30 Favorable
Explanation:
Calculation for the activity variance for supplies cost in March
Using this formula
Activity variance = (Actual units - Budgeted units) * Variable cost
Where,
Actual units=856
Budgeted units=861
Variable cost=$6
Let plug in the formula
Activity variance=(856-861) * $6
Activity variance=5*$6
Activity variance=$30 Favorable
Therefore the activity variance for supplies cost in March would be closest to: $30 Favorable
Ý nghĩa lý luận và thực tiễn của tiểu luận
Answer:
talk in English man
please foll and sorry
The Government Accounting Office (GAO) announces deep cuts to social security, Medicare, and welfare programs. Which determinant of aggregate demand causes the change
Answer:
Consumer spending
Explanation:
Consumer spending is the amount that individuals and families spend on final goods and services for personal use and enjoyment in the economy. Contemporary measures of consumer spending include all private purchases of durable goods, durable goods and services. Consumer spending can be thought of as a combination of personal savings, investment cost, and output in the economy.so correct answer is Consumer spendingFlorian just graduated from law school and wants to start his own law firm. It is best for Florian to use a _____ organizational structure.
Answer:
Given that Florian is just starting out and the firm is new, the best organisational structure he can use is the Simple organisational structure.
Explanation:
A simple organisational structure features the CEO in all decision making process. Any new staff would only an extension of his authority.
As the company grow in size, it can become more functional and even adopt a matrix organisational structure. This helps it keep it's size small while making full use of the capabilities of the staff on adhoc projects.
Cheers!
"Which of the following are covered under the Securities Exchange Act of 1934? I Registration of new issues II Stabilization of new issues III Registration of exchanges IV Registration of broker/dealers"
Answer: II. stabilization of new issues
III. registration of exchanges
IV. registration of broker-dealers
Explanation:
The Securities Exchange Act of 1934 was put in place in order to be in charge of security trading.
From the options, those that are covered under the Securities Exchange Act of 1934 include the stabilization of new issues, the registration of exchanges and the registration of broker/dealers.
It should be noted that the Securities Exchange Act of 1934 does not cover the registration of new issues.
Care Foundation is a voluntary health and welfare organization funded by contributions from the general public. In its Statement of Activities, the annual provision for depreciation should:
Question options:
A) Not be included.
B) Be included as an element of support.
C) Be included as an element of changes in fund balances.
D) Be included as an element of expense.
Answer:
D) Be included as an element of expense
Explanation:
Care foundation is a voluntary health and welfare organization funded by contributions from the public and therefore is a non-profit organization. Non profit organizations use statement of activities and not income statements used by for profit organizations in reporting revenue and expenses for the year. In the case of non profit organizations, statement of activities are reported as statement of expenses for the year.
Under GASB, direct expenses are expenses that can be linked to a program, department or activity and therefore can be directly linked to that function. Depreciation is a direct expense for non profit accounts and should be charged as expense for the relevant year based on the function of the capital asset it can be traced to. For example a capital asset that can be linked to a particular function should charge it's depreciation expenses as direct expenses based on its functions
Which of the following is not true about amortization of Limited-Life Intangibles a. Amortize by systematic charge to expense over useful life. b. Credit asset account or accumulated amortization. c. Useful life should reflect the periods over which the asset will contribute to cash flows. d. Amortization should be cost less residual value. e. IFRS requires companies to assess the residual values and useful lives of intangible assets at least annually. f. None of the above
Answer:
Amortization of Limited-Life Intangibles:
f. None of the above
Explanation:
IFRS requires limited-life intangibles to be systemically amortized throughout their useful lives using either units of activity method or straight-line method. Intangibles are amortized to reduce their values as per use over their lifespan. Amortization is like depreciation, but depreciation is a term used for tangible assets, while amortization is used for intangible assets.
Suver Corporation has a standard costing system. The following data are available for June: Actual quantity of direct materials purchased 24,000 pounds Standard price of direct materials $ 6.00 per pound Material price variance $ 6,000 Unfavorable Material quantity variance $ 2,400 Favorable The actual price per pound of direct materials purchased in June was:
Answer:
$6.25
Explanation:
Given the data below from the above information,
The actual quantity of direct materials purchased 24,000 pounds
Standard price of direct materials price $6 per pound
Material price variance unfavorable -$6,000
Material quantity variance $2,400
Therefore;
Direct material price Variance = (Standard price - Actual price) × Actual quantity
- $6,000 = ($6 - Actual price ) × 24,000
-$6,000 = $144,000 - 24,000 AP
24,000 AP = $144,000 + $6,000
24,000 AP = $150,000
AP = $6.25
At an output level of 415,400 units, you have calculated that the degree of operating leverage is 2.00. The operating cash flow is $58,000 in this case. Ignore the essect of taxes. What will be the new degree of operating leverage for output levels of 16,400 units and 14,400 units
Answer:
the new degree of operating leverage for output levels of 16,400 units and 14,400 units will be -0.0858 and - 0.0745 respectively.
Explanation:
From the given information:
the degree of operating the leverage at 415,400 units = [tex]\mathtt{\dfrac{contribution \ \ margin}{operating \ \ income}}[/tex]
where contribution margin = 2 × 58000 =116000
If we assume that the sales price should be p and the variable cost be q per unit .
Then, 415,400p - 415,400q = 116000
p - q = [tex]\mathtt{\dfrac{116000}{415400}}[/tex]
p - q = 0.279 at 415400 unit
Contribution margin = 415400 × 0.279
Contribution margin = 115896.6
The operating income = contribution margin - fixed expense
58000 = 115896.6 - fixed expense
fixed expense = 115896.6 - 58000
fixed expense = 57896.6
However, when the output level is 16400 unit,
the contribution margin = 16400(p-q)
the contribution margin = 16400(0.279)
the contribution margin = 4575.6
The operating leverage = [tex]\mathtt{\dfrac{contribution \ \ margin}{contribution \ \ margin - fixed \ \ costs}}[/tex]
The operating leverage = [tex]\mathtt{\dfrac{4575.6}{4575.6 - 57896.6}}[/tex]
The operating leverage = [tex]\mathtt{\dfrac{4575.6}{-53321}}[/tex]
The operating leverage = -0.0858
when the output level is 14400 unit,
the contribution margin = 14400(p-q)
the contribution margin = 14400(0.279)
the contribution margin = 4017.6
The operating leverage = [tex]\mathtt{\dfrac{contribution \ \ margin}{contribution \ \ margin - fixed \ \ costs}}[/tex]
The operating leverage = [tex]\mathtt{\dfrac{4017.6}{4017.6 - 57896.6}}[/tex]
The operating leverage = [tex]\mathtt{\dfrac{4017.6}{-53879}}[/tex]
The operating leverage = - 0.0745
Quick Company's lease payments are made at the end of each period. Quick's liability for a capital lease will be reduced periodically by the minimum lease payment, adjusted by:
Question:
Quick Company’s lease payments are made at the end of each period. Quick’s liability for a capital lease will be reduced periodically by the
A. Minimum lease payment.
B. Minimum lease payment plus the amortization of the related asset.
C. Minimum lease payment less the amortization of the related asset.
D. Minimum lease payment less the portion of the minimum lease payment allocable to interest.
Answer:
The correct choice is D.
Explanation:
The present value of the minimum lease payments is the lease payable. The total amount of lease payable is diminished by the percentage of the lease payment chargeable to the lease owed.
This amount is the lease payment minus the interest on the payment. Therefore, the liability is reduced by the minimum lease paid in each period minus the portion of the payment allocable to interest.
Cheers!
A market economy is regulated by the interactions between which two things?
Answer:
b is the answer
Explanation:
producers and consumers
Which of the following is true of email?
A. It’s illegal for employers to monitor it.
B. Many companies monitor employee messages.
C. Deleting ensures the messages are never read.
D. Only the recipient has the ability to open it.
Answer:D
Explanation:
The Greenbriar is an all-equity firm with a total market value of $584,000 and 22,800 shares of stock outstanding. Management is considering issuing $197,000 of debt at an interest rate of 10 percent and using the proceeds on a stock repurchase. Ignore taxes. How many shares will the firm repurchase if it issues the debt securities
Answer:
7,691 stocks
Explanation:
total market value = $584,000
total outstanding stocks = 22,800
price per stock = $584,000 / 22,800 = $25.614 per stock
management can repurchase $197,000 / $25.614 per stock = 7,691.1 = 7,691 stocks
stocks outstanding after repurchase = 22,800 - 7,691 = 15,109 stocks
A monopolist faces a
A. a two-tiered demand curve.
B. a perfectly elastic demand curve.
C. the market demand curve.
D. a perfectly inelastic demand curve.
Answer:
C
Explanation:
Pear Corporation is considering Alternative A and Alternative B. Costs associated with the alternatives are listed below:
Alternative A Alternative B
Materials costs $ 40,000 $ 56,000
Processing costs $ 37,000 $ 37,000
Equipment rental $ 13,000 $ 13,000
Occupancy costs $ 15,000 $ 22,000
Are the materials costs and processing costs relevant in the choice between alternatives A and B?
Multiple Choice
A) Only processing costs are relevant
B) Only materials costs are relevant
C) Both materials costs and processing costs are relevant
D) Neither materials costs nor processing costs are relevant
Answer: B) Only materials costs are relevant
Explanation:
When choosing between alternatives, the main decider is the difference in costs. The costs that are different are the ones to decide whether a company takes on a project as it will signal the financial viability of a project.
In both alternatives, the Processing costs remain at $37,000 therefore the alternative chosen is irrelevant to these costs as they will be incurred regardless of the company's choice. They are therefore not to be considered.
Material costs on the other hand vary by the alternatives and so should be considered.
Under the allowance method, when writing off an account receivable, the journal entry to record the write-off includes a credit to:
Answer: credit to Accounts Receivable
Explanation:
Accounts Receivable is the payment that a particular company will get from the customers who have bought the company's product or services on credit.
Under the allowance method, when writing off an account receivable, the journal entry to record the write-off includes a credit to account receivables.
All of the following statements concerning the characteristics of aggregate planning for services is true except
A. Group of answer choices
B. Demand is difficult to predict
C. Most services can be inventoried
D. Capacity is easy to predict
E. Labor is the most constraining resource
Answer: D. Capacity is easy to predict
Explanation:
Aggregate planning for services involves organising the business areas of companies engaging in service provision or operation companies that also provide a service.
It is generally held that demand is difficult to predict and most services can be inventoried. It is also held that labor is the most constraining resource.
However, capacity in aggregate planning for services is not easy to predict. This is because services are not standadized and are instead varied and mostly unique. Therefore knowing the capacity to give to a service becomes hard to predict.